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Two online magazine companies reported the following in their financial statements: Net income Total stockholders' equity Earnings per share Stock price when annual results reported
Two online magazine companies reported the following in their financial statements: Net income Total stockholders' equity Earnings per share Stock price when annual results reported BusinessWorld 2015 2014 $ 111,500 $108,904 602,186 527,814 3.50 3.49 55.15 51.79 Fun and Games 2015 2014 $ 92,920 $172,473 462,151 482,049 2.40 4.28 33.30 60.45 Required: 1-a. Compute the 2015 ROE for each company. (Round your answers to 1 decimal place.) ROE BusinessWorld Fun and Games 1-b. Which company appears to generate greater returns on stockholders' equity in 2015? BusinessWorld Fun and Games Both Companies appear to generate the same return on equity 2-a. Compute the 2015 P/E ratio for each company. (Round your answers to 1 decimal place.) P/E Ratio times Business World Fun and Games times 2-b. Which company do investors appear to value more? BusinessWorld Fun and Games Both Companies appear to generate the same return on equity
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